U.S. patent application number 09/010919 was filed with the patent office on 2001-11-08 for offer matching system.
Invention is credited to MACKENZIE, CLIFFORD A., ORDISH, CHRISTOPHER J., RICHARDS, JOHN M..
Application Number | 20010039527 09/010919 |
Document ID | / |
Family ID | 10687080 |
Filed Date | 2001-11-08 |
United States Patent
Application |
20010039527 |
Kind Code |
A1 |
ORDISH, CHRISTOPHER J. ; et
al. |
November 8, 2001 |
OFFER MATCHING SYSTEM
Abstract
An improved matching system for trading instruments in which the
occurrence of automatically confirmed trades is dependent on
receipt of match acknowledgement messages by the host computer
(200) from all counterparties (KS A, KS B) to the matching trade.
The host computer (200) matches like bids and offers provided
thereto by the various keystations (KS A, KS B) in accordance with
a predetermined matching criteria. Each of the keystations (KS A,
KS B) includes a trade status timer (300, 302) and a display (310,
312) for timing receipt of a confirmed trade and/or ticket
generation message from the host (200) after the keystation (KS A,
KS B) has sent a match acknowledgement message and for displaying
an "unconfirmed trade" status message awaiting receipt of the
"confirmed trade" indication from the host (200). An alarm and a
display message is provided at the keystation (KS A, KS B) when the
"confirmed trade" indication is not timely received. The host (200)
receives match acknowledgement messages from all of the
counterparties (KS A, KS B) to the match before confirming a trade.
A ticket is not generated at the keystation (KS A, KS B) until the
trade has been confirmed by the host (200).
Inventors: |
ORDISH, CHRISTOPHER J.;
(SURREY, GB) ; RICHARDS, JOHN M.; (DIDCOT, GB)
; MACKENZIE, CLIFFORD A.; (DIX HILLS, NY) |
Correspondence
Address: |
BANNER & WITCOFF LTD
1001 G STREET NW
WASHINGTON
DC
200014597
|
Family ID: |
10687080 |
Appl. No.: |
09/010919 |
Filed: |
January 23, 1998 |
Related U.S. Patent Documents
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Application
Number |
Filing Date |
Patent Number |
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09010919 |
Jan 23, 1998 |
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08364009 |
Dec 27, 1994 |
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5727165 |
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Current U.S.
Class: |
705/37 |
Current CPC
Class: |
G06Q 40/04 20130101 |
Class at
Publication: |
705/37 |
International
Class: |
G06F 017/60 |
Foreign Application Data
Date |
Code |
Application Number |
Dec 17, 1990 |
GB |
9027249.3 |
Feb 27, 1991 |
GB |
9104121.0 |
Jul 5, 1991 |
GB |
91306146.1 |
Claims
What is claimed is:
1. In a matching system for trading instruments in which bids for
said trading instruments are automatically matched against offers
for given trading instruments for automatically providing matching
transactions in order to provide confirmed trades for said given
trading instruments, said system comprising a host computer means
for matching like bids and offers provided thereto in accordance
with a predetermined matching criteria, a transaction originating
keystation means for providing a bid on a given trading instrument
to said system for providing a potential matching transaction, a
counterparty keystation means for providing an offer on said given
trading instrument involved in said potential matching transaction,
and network means for interconnecting said host computer means,
said transaction originating keystation means, and said
counterparty keystation means in said system for enabling data
communications therebetween; the improvement comprising match
notification data message generation means for providing a match
notification data message to said transaction originating
keystation means and said counterparty keystation means via said
network means in response to the occurrence of a matching
transaction at said host computer means, said host computer means
comprising said match notification data message generation means,
said match notification data message comprising an unconfirmed
matching transaction for said given trading instrument; and match
acknowledgement data message generation means disposed at each of
said keystation means for respectively providing a match
acknowledgement data message to said host computer means via said
network means in response to receipt of said match notification
data message by said transaction originating keystation means and
said counterparty keystation means, respectively; said host
computer means further comprising confirmed trade data message
generation means for providing a confirmed trade data message to
said transaction originating keystation means and said counterparty
keystation means via said network means in response to receipt of
said match acknowledgement data messages from both said transaction
originating keystation means and said counterparty keystation
means; said transaction originating keystation means and said
counterparty keystation means each further comprising trade status
timing means for timing receipt of said confirmed trade data
message by said respective keystation means for providing a trade
status display at said respective keystation means based on said
timed receipt/of said confirmed trade data message; whereby the
occurrence of automatically confirmed trades is dependent on match
acknowledgement from all counterparties to the matching trade.
2. An improved matching system in accordance with claim 1 wherein
said trade status timing means further comprises means for timing
receipt of said confirmed trade data message by said respective
keystation means in response to provision of said match
acknowledgement data message from said respective keystation
means.
3. An improved matching system in accordance with claim 2 wherein
said trade status timing means further comprises means for timing
receipt of said confirmed trade data message by said respective
keystation means for providing a confirmed trade status display in
response to receipt of said confirmed trade data message by said
respective keystation means within a predetermined time
interval.
4. An improved matching system in accordance with claim 1 wherein
said trade status timing means further comprises means for timing
receipt of said confirmed trade data message by said respective
keystation means for providing a confirmed trade status display in
response to receipt of said confirmed trade data message by said
respective keystation means within a predetermined time
interval.
5. An improved matching system in accordance with claim 4 wherein
said trade status timing means further comprises means for
providing an unconfirmed trade status display during said
predetermined time interval.
6. An improved matching system in accordance with claim 5 wherein
said trade status timing means further comprises alarm means for
providing an alarm condition for said respective keystation means
when said confirmed trade data message is not received within said
predetermined time interval.
7. An improved matching system in accordance with claim 6 wherein
said trade status timing means further comprises means for
providing a late confirmed trade status display in response to
receipt of said confirmed trade data message after said
predetermined time interval.
8. An improved matching system in accordance with claim 7 wherein
said trade status timing means further comprises means for timing
receipt of said confirmed trade data message by said respective
keystation means in response to provision of said match
acknowledgement data message from said respective keystation
means.
9. An improved matching system in accordance with claim 8 wherein
said trade status timing means further comprises message display
means for displaying said trade status display at said respective
keystation means.
10. An improved matching system in accordance with claim 9 wherein
said trading instruments comprise financial trading
instruments.
11. An improved matching system in accordance with claim 1 wherein
said trade status timing means further comprises alarm means for
providing an alarm condition for said respective keystation means
when said confirmed trade data message is not received within a
predetermined time interval.
12. An improved matching system in accordance with claim 11 wherein
said trade status timing means further comprises means for timing
receipt of said confirmed trade data message by said respective
keystation means in response to provision of said match
acknowledgement data message from said respective keystation
means.
13. An improved matching system in accordance with claim 12 wherein
said trade status timing means further comprises means for timing
receipt of said confirmed trade data message by said respective
keystation means for providing a confirmed trade status display in
response to receipt of said confirmed trade data message by said
respective keystation within said predetermined time interval.
14. An improved matching system in accordance with claim 13 wherein
said trade status timing means further comprises means for
providing an unconfirmed trade status display during said
predetermined time interval.
15. An improved matching system in accordance with claim 14 wherein
said trade status timing means further comprises means for
providing a late confirmed trade status display in response to
receipt of said confirmed trade data message after said
predetermined time interval.
16. An improved matching system in accordance with claim 5 wherein
said trade status timing means further comprises means for timing
receipt of said confirmed trade data message by said respective
keystation means in response to provision of said match
acknowledgement data message from said respective keystation
means.
17. An improved matching system in accordance with claim 1 wherein
said trade status timing means further comprises message display
means for displaying said trade status display at said respective
keystation means.
18. An improved matching system in accordance with claim 17 wherein
said trade status timing means further comprises means for timing
receipt of said confirmed trade data message by said respective
keystation means in response to provision of said match
acknowledgement data message from said respective keystation
means.
19. An improved matching system in accordance with claim 18 said
trade status timing means further comprises alarm means for
providing an alarm condition for said respective keystation means
when said confirmed trade data message is not received within said
predetermined time interval.
20. An improved matching system in accordance with claim 1 wherein
said trading instruments comprise financial trading
instruments.
21. An improved matching system in accordance with claim 1 wherein
said confirmed trade data message generation means further
comprises trading ticket data generation means, each of said
keystation means further comprising means responsive to receipt of
a trading ticket data message from said trading ticket data
generation means for automatically providing a trading ticket
corresponding to said confirmed trade.
22. An improved matching system in accordance with claim 21 wherein
said trade status timing means further comprises means for timing
receipt of said confirmed trade data message by said respective
keystation means in response to provision of said match
acknowledgement data message from said respective keystation
means.
23. An improved matching system in accordance with claim 22 wherein
said trade status timing means further comprises alarm means for
providing an alarm condition for said respective keystation means
when said confirmed trade data message is not received within a
predetermined interval.
24. An improved matching system in accordance with claim 23 wherein
said host computer means further comprises alarm means for timing
receipt of said match acknowledgement data message from said
counterparty keystation means for providing an alert condition data
message to said transaction originating keystation means when said
match acknowledgement data message is not received from said
counterparty keystation means within a predetermined time interval,
said transaction originating keystation means alarm means further
comprising means responsive to receipt of said alert condition data
message for providing an alarm condition for said transaction
originating keystation means.
25. An improved matching system in accordance with claim 1 wherein
said host computer means further comprises alarm means for timing
receipt of said match acknowledgement data message from said
counterparty keystation means for providing an alert condition data
message to said transaction originating keystation means when said
match acknowledgement data message is not received from said
counterparty keystation means within a predetermined time
interval.
26. An improved matching system in accordance with claim 25 wherein
said trade status timing means further comprises alarm means for
providing an alarm condition for said respective keystation means
when said confirmed trade data message is not received within a
predetermined interval.
27. An improved matching system in accordance with claim 26 wherein
said transaction originating keystation means alarm means further
comprises means responsive to receipt of said alert condition data
message for providing an alarm condition for said transaction
originating keystation means.
28. An improved matching system in accordance with claim 1 wherein
each of said keystation means further comprises store and print
means for storing and printing received messages and their
status.
29. An improved matching system in accordance with claim 28 wherein
said trade status timing means further comprises alarm means for
providing an alarm condition for said respective keystation means
when said confirmed trade data message is not received within a
predetermined time interval.
30. An improved matching system in accordance with claim 1 wherein
each of said keystation means further comprises storage means for
storing an initial data message, said match acknowledgement data
message generation means comprising means for acknowledging said
initial message after storage thereof.
31. An improved matching system in accordance with claim 30 wherein
said trade status timing means further comprises alarm means for
providing an alarm condition for said respective keystation means
when said confirmed trade data message is not received within a
predetermined time interval.
32. In an offer matching system comprising a host station, a
plurality of client stations respectively connected to the host
station by a communication link, said host station comprising means
for matching bids and offers provided to said host station by said
client stations; the improvement comprising a timer device at each
of said client station means for acknowledging trading messages
received at one of said client stations, said timer device being
started in response to a first trading message at said one client
station; and an alarm at said one client station responsive to said
timer device continuing beyond a predetermined time.
33. A system as claimed in claim 32 wherein said first trading
message is a trading message received from another client station
in response to an offer made from said one client station.
34. A system as claimed in claim 32 wherein said first trading
message is a trading message from said one client station
acknowledging a trading message received from another client
station.
35. A system as claimed in claim 32 wherein said one client station
comprises a status indicator, said status indicator being
responsive to the timing out of said timer device to indicate
`unconfirmed` status and being set to `confirmed` status by the
receipt of said second trading message at said one client
station.
36. A system as claimed in claim 33 wherein said one client station
comprises a status indicator, said status indicator being
responsive to the timing out of said timer device to indicate
`unconfirmed` status and being set to `confirmed` status by the
receipt of said second trading message at said one client
station.
37. A system as claimed in claim 34 wherein said one client station
comprises a status indicator, said status indicator being
responsive to the timing out of said timer device to indicate
`unconfirmed` status and being set to `confirmed` status by the
receipt of said second trading message at said one client
station.
38. A system as claimed in claim 35 wherein said one client station
comprises an alarm operable in response to said unconfirmed
status.
39. A system as claimed in claim 38 wherein said one client station
comprises a store and print device to store and print received
messages and their status.
40. A system as claimed in claim 32 wherein said one client station
comprises a store and print device to store and print received
messages and their status.
41. A system as claimed in claim 32 wherein said one client station
comprises a store to store an initial message, said acknowledgement
means being arranged to acknowledge said initial message after
storage thereof.
42. A system as claimed in claim 32 wherein said host station
comprises a timer operable in response to a message received from a
client station and re-settable in response to a message received
from an associated client station.
Description
CROSS-REFERENCE TO RELATED APPLICATIONS
[0001] This application is related to the commonly owned co-pending
U.S. Patent Applications entitled "Distributed Matching System"
filed May 25, 1989, bearing U.S. Ser. No. 357,036; "Distributed
Matching System Method;" filed May 25, 1989, bearing U.S. Ser. No.
357,484; "Anonymous Matching System," filed May 26, 1989, bearing
U.S. Ser. No., 357,748; "Integrated Trading System," filed Nov. 22,
1989, bearing U.S. Ser. No. 440,971; and "Integrated Trading System
Method," filed Nov. 22, 1989, bearing U.S. Ser. No. 441,156; and
U.S. Pat. No. 5,003,473, issued Mar. 26, 1991 and entitled "Trading
Ticket Output System," the contents of all of which are
specifically incorporated by reference herein in their entirety,
and is an improvement thereon.
TECHNICAL FIELD
[0002] The present invention related to matching systems for
effectuating trades of trading instruments through automatic
matching in which buyers and sellers who are willing to trade with
one another based on specified criteria may automatically trade
when matching events occur satisfying these criteria, and more
particularly to improvements in such matching systems in which
risks are minimized as to losses due to broken trades.
BACKGROUND ART
[0003] Information retrieval systems for financial information,
such as stock market type of information and money market
information, normally employ a transfer of data in a
high-performance, real-time information retrieval network in which
update rates, retrieval rates and subscriber and/or user population
are generally very high. An example of such a system is assignee's
REUTER MONITOR DEALING SERVICE which is used in the foreign
exchange or money market. Such systems, while providing rapid video
conversation capability, and the ability, in the instance of
Reuters' MONITOR DEALING SERVICE, to display a message when a
connection is lost during a negotiated trade, are not anonymous
systems nor do they provide for automated anonymous trading such as
is possible in a matching system. Of course, conversational dealing
systems have their place in the market and serve particular needs
where appropriate. However, anonymous matching systems are also
often desired and, by their very nature, do not normally employ a
conversation capability since the parties to the transactions are
unknown until the transaction has been completed. Examples of
satisfactory prior art video conversational systems for use in
connection with trading of financial information are disclosed in
commonly owned U.S. Pat. Nos. 4,531,184; 4,525,779 and 4,404,551,
by way of example. In this regard, U.S. Pat. No. 4,525,779
discloses a feature termed a DEAL KEY for providing a visual
confirmation signal during a negotiated trade but does not concern
itself with the problems of anonymous matching trades and the types
of confirmations required therein to complete a deal in which risks
are minimized as to losses due to broken trades.
[0004] Prior art examples of matching systems used in connection
with the trading of trading instruments are disclosed in U.S. Pat.
No. 4,412,287, and U.K. Patent Nos. 1,489,571 and 1,489,573, all of
which disclose automatic stock exchanges in which a computer
matches buy and sell orders for a variety of stocks; U.S. Pat. No.
3,573,747, which discloses an anonymous trading system for selling
fungible properties between subscribers to the system; U.S. Pat.
No. 3,581,072, which discloses the use of a special purpose digital
computer for matching orders and establishing market prices in an
auction market for fungible goods; U.S. Pat. No., 4,674,044, which
discloses an automatic securities trading system; and U.S. Pat. No.
4,903,201, which discloses an automated computerized, open outcry
exchange system for trading commodity contracts through automatic
matching. Other such prior art matching systems are SOFFEX, such as
described in the Feb. 15, 1988 issue of Asian Finance at pages
22-23 TAFEX; such as described in the May 1976 issue of
Institutional Investor at pages 32-36; and VSE's MATCHMAKER,
described in the Aug. 4, 1988 issue of Competing Canada, at pages
12, 42. However, none of these prior art matching systems
implements or suggests the use of risk controls to minimize risks
as to losses due to broken trades, which are situations in which
you are not entirely sure which trades have been completed or not
due to a failure somewhere in the system, such as a network
failure, a control system or host failure, or a keystation failure,
all of which could result in one party thinking a trade or match
had occurred while the counterparty was completely unaware of the
trade. Applicants' assignee has recently overcome some of these
problems in matching systems which it has introduced under the
names of GLOBEX, such as described in the Feb. 13, 1989 issue of
the New York Times at pages D1, D6, and REUTER DEALING 2000
Automatic FX Matching network. However, these systems have involved
a transaction desk in which trades had to be "voted upon"
automatically at a site remote to the host computer and to the
individual keystations before ultimately becoming completed trades.
Such an arrangement lacks many of the advantages of the invention
herein, particularly in the type of dynamic environment in which
such matching systems are normally employed. Moreover, no prior art
distributed anonymous matching systems are known to applicants in
which broken trade alerts are timely provided when a system failure
occurs after a match which prevents immediate notification to all
counterparties of confirmation of the trade. Furthermore, no such
prior art matching systems are known to applicants in which the
timing of responses to positive match acknowledgements are utilized
by the keystations attempting to avoid broken trades. This is so
despite the well known monitoring of computer signals to detect
communication faults, such as disclosed in U.S. Pat. Nos.
3,745,800; 4,276,593; 4,625,276; 4,789,928; and 4,713,811.
[0005] Nevertheless, in anonymous matching systems, such as
described in U.S. patent application Ser. No. 357,758, filed May
26, 1989, and incorporated by reference herein, there can be a
problem when one communication channel fails during the matching
transaction. It may occur that although confirmation is sent to one
keystation or counterparty and acknowledged, the other counterparty
to the matching transaction which occurred at the host does not
receive details of the contract and/or his acknowledgement does not
reach the host computer or central system. If the communication
channel which fails is that of the purchaser and failure occurs
after he has made his offer to buy but before he receives an
acceptance, the seller will have offered to sell, will have
received details of the contract from the host or central system
and will have acknowledged receipt of the host or central system so
that as far as the seller is concerned, the contract or deal is
complete. The buyer will have received details of the offer from
the host or central system and have made his acceptance or an
alternative offer to buy but due to the channel failure he will not
have received any details of the contract. He will be uncertain of
his position and may assume that his acceptance was too late or his
offer to buy has not been accepted and consider the deal or
contract not made. This will leave the host or central system and
the buyer at odds, and if the terms of business are appropriate, it
may be that the host or central system has to purchase the items
from the seller and attempt to sell them in the market itself,
possibly at a loss, if the buyer has considered the contract not
made.
[0006] The present invention attempts to overcome these problems of
the prior art by providing a time lapse generator or trade status
timing system at each keystation. If desired, a time lapse
generator can also be provided at the host or central station, for
timing receipt of match acknowledgement signals after match
notification by the host. If a client or keystation is making an
offer to sell, his offer to sell is transmitted to the host
computer or central station as in the aforementioned U.S. Pat. No.
357,748, by way of example, and when a deal is matched, details of
the amount offered for purchase are sent back to the selling client
or keystation who provides a match acknowledgement message to the
host computer. The time lapse is generated at the client or
keystation following the receipt of a message from the host or
central system and will in due course generate an alarm if within a
predetermined time lapse period a further message is not received
back from the host or central system indicating a confirmed trade,
such as along with a ticket generation message. The time lapse is
preferably started by the receipt and storage of a message but it
could be started by the transmission of an outgoing message. If the
time lapse generator is not stopped within a predetermined time,
the alarm is generated and the keystation is alerted that the deal
is denoted as suspect, requiring further checking with the other
party or with the host or central station before it can be
considered binding.
[0007] It may be arranged in the improved matching system of the
present invention that the identity of the other party to the
matching transaction is not revealed at the initial message sending
stage. In such an instance, when an alarm is raised, the client or
relevant keystation is simply informed that his deal is not fully
confirmed and that further checking is required. Since he does not
know the identity of the other party, he clearly cannot check with
him but instead can check with a central enquiry station who would
then check with the other party and report back to the enquiring
party that the deal is either confirmed or cancelled. It could also
be arranged, if desired, in the improved matching system of the
present invention, that the identity of the other party is
transmitted in the initial message but is simply kept hidden by the
display apparatus at the client's keystation until full
confirmation is achieved. This latter approach would preferably
avoid any problems of a client adopting different modes of enquiry
according to the identity of his possible buyer or vendor. In the
anonymous system to be described herein by way of example, the
details of the other party are only displayed at the final
confirmation of the bargain or trade.
[0008] As will be described hereinafter, the improved matching
system of the present invention overcomes the disadvantages of the
prior art in minimizing risks as to losses due to broken trades,
such as by ensuring that the occurrence of automatically confirmed
trades is dependent on match acknowledgement from all
counterparties to the matching trade, and by monitoring trade
status of matching transactions.
DISCLOSURE OF THE INVENTION
[0009] An improved matching system for trading instruments in which
the occurrence of automatically confirmed trades is dependent on
match acknowledgement from all counterparties to the matching
trade. In the system of the present invention, bids for the trading
instruments which may be any type of trading instrument such as
foreign exchange, stocks, bonds, commodities future contracts,
etc., are automatically matched against offers for given trading
instruments for automatically providing matching transactions in
order to provide confirmed trades for the given trading
instruments. The system comprises a host computer or central
station for matching like bids and offers provided thereto in
accordance with a predetermined matching criteria, a transaction
originating keystation or client for providing a bid on a given
trading instrument to the system for providing a potential matching
transaction, a counterparty keystation or client for providing an
offer on the given trading instrument involved in the potential
matching transaction, and a network or communications link for
interconnecting the host computer, the transaction originating
keystation, and the counterparty keystation in the system for
enabling data communications therebetween. The host computer
comprises match notification data message generation means for
providing a match notification data message to the transaction
originating keystation and the counterparty keystation via the
network in response to the occurrence of a matching transaction at
the host computer, which is the central location at which matches
automatically take place in accordance with the predetermined
matching criteria, such as described in the aforementioned U.S.
Ser. No. 357,748. The match notification data message comprises an
unconfirmed matching transaction for the given trading instrument,
which is an indication that a match has occurred but that the deal
has not been confirmed or completed since all counterparties to the
deal have not yet been notified. Match acknowledgement data message
generation means are located at each of the keystations for
respectively providing a match acknowledgement data message to the
host computer via the network in response to receipt of the match
notification data message by the transaction originating keystation
means and the counterparty keystation, respectively, so that
confirmation of the trade, and ultimate ticket generation, can
occur. The host computer further comprises confirmed trade data
message generation means for providing a confirmed trade data
message to the transaction originating keystation and the
counterparty keystation via the network in response to receipt of
the match acknowledgement data messages from both the transaction
originating keystation and the counterparty keystation. The
transaction originating keystation and the counterparty keystation
each further comprise trade status timing means for timing receipt
of the confirmed trade data message by the respective keystation
for providing a trade status display at the respective keystation
based on the timed receipt of the confirmed trade data message. The
trade status timing arrangement is such that an alarm condition is
provided to the keystation when the confirmed trade data message is
not received within a predetermined time interval, a confirmed
trade status display is provided at the keystation if this message
is received within this timed interval, and a late confirmed trade
status display is provided if this message is received after this
timed interval. During this time interval, until a confirmed trade
occurs, an unconfirmed trade status display is provided. The host
computer may also employ a timing arrangement for timing receipt of
the match acknowledgement data messages from the keystations in
order to provide an alarm condition to the respective keystation if
a match acknowledgement data message has not been timely received
from the other party to the trade.
BRIEF DESCRIPTION OF THE DRAWINGS
[0010] Examples of the invention will now be described with
reference to the accompanying drawings in which:
[0011] FIGS. 1 and 8 are diagrams of a central station with two
client keystations, by way of example, showing the message between,
and operations at, each keystation in diagrammatic form in
connection with a typical anonymous matching transaction, and
[0012] FIGS. 2 to 7 are message flow charts for various events
which take place in the systems of FIGS. 1 and 8 in arriving at a
confirmed trade in which risks are minimized as to losses due to
broken trades.
BEST MODE FOR CARRYING OUT THE INVENTION
[0013] Referring now to the drawings in detail, and initially to
FIGS. 1 and 8, the improved matching system of the present
invention is shown in diagrammatic form. In this regard, the system
of the present invention is generically illustrated in FIG. 1 and
is further illustrated, by way of example, in FIG. 8, as an
improvement over the anonymous matching system described in U.S.
Ser. No. 357,748 the contents of which are specifically
incorporated by reference herein in their entirety. In the message
diagram of FIG. 1, various messages are shown as being transmitted
between stations in a typical transaction, with the other stations
in the network having been omitted for purposes of clarity. Each
station can be considered to have a signal terminal S and a message
terminal T for each message. For a transmitted message, the
operator of the station conventionally causes a signal to be
applied to the signal terminal and this causes the message to be
conventionally transmitted from T. For a received message, the
message is conventionally applied to T and this causes a command
signal to be conventionally generated at S. Separate terminals and
message lines are shown for each message, but in practice a single
communication channel between the host and a client or keystation
will suffice, and separate terminals for each message may not be
necessary since the station will, in practice, conventionally
receive a message and detect which type of message it is and
generate appropriate command signals and apply them to appropriate
devices at that station. For ease of understanding, it is
convenient to illustrate the system with a plurality of message
lines and terminals, even though they may not be separately present
in practice.
[0014] The connection and operation of the system will generically
be described with reference to the situation in which client A (KS
A) makes an offer to sell one million of a given trading instrument
at a given price and this offer is transmitted as message 1 to the
central system known as the host computer 200. This offer is
anonymously broadcast as message 2 to all clients or keystations,
including client A (KS A) who made the offer and client B (KS B),
by the host computer 200. If client B does not wish to buy the full
one million of the given trading instrument but makes a counter
offer as message 3 to buy one hundred thousand of the trading
instrument at that price, the host computer sends a message 4 to
client A (KS A) that he has sold one hundred thousand of the
trading instrument to client B at the offered price and it sends
message 6 to client B (KS B) that he has bought that amount.
[0015] The receipt of message 4 at terminal T4, in conventional
fashion, prompts a command signal at terminal S4 which is fed to
two locations. The first location is a conventional data storage
device S which stores the message, and after storage causes the
sending of a match acknowledgement message 5 from terminal S5 to
the host computer 200 of the receipt of the message at client A (KS
A). The second location is the timer T which is started. These
procedures are diagrammatically indicated by connections in FIG. 1,
with the match acknowledgement procedure being illustrated by the
flow chart of FIG. 2.
[0016] Similarly message 6 received at T6 at client station B (KS
B) is conventionally fed to a corresponding conventional data
storage device SB and to timer TB from terminal S6; the stored
message from SB is returned in a match acknowledgement at S7 and
sent back to the host computer 200 as message 7 from terminal
T7.
[0017] As will be described later, messages 5 and 7 at the host
computer 200 preferably prompt the transmission of confirmed trade
acknowledgement messages 8 and 9 to the client keystations KS B and
KS A, respectively.
[0018] The timers TA and TB preferably have 15 second periods, by
way of example, although any other desired timing period may be
chosen. At client station A (KS A), if a confirmed trade message 9
is received within this predetermined period, it simply
conventionally causes a conventional store and print device (SP)
and/or display 202, 204 to store and print the bargain or trade as
confirmed and/or to display a confirmed trade status message on the
display 202, 204 at the respective keystations KS A, KS B. If the
timer reaches the end of its predetermined period before a
confirmed trade message 9 has been received, then, preferably the
time-out signal is fed firstly to the store and print device (SP)
and/or display 202, 204, where it causes the device to store and
print and/or display the trade as "unconfirmed" and secondly to the
set status device where the status is set to "unconfirmed" which
activates an associated alarm to warn the client at the appropriate
keystation of the unconfirmed trade, as shown by way of example, in
the connections of FIG. 1 and the message flow chart of FIG. 3. If
in the above example, the "confirmed trade" message is received
after the end of the predetermined 15 second period, the message
preferably acts as described above when the message is received
within the predetermined 15 second period, but also resets the `set
status` device from "unconfirmed" to "confirmed" which de-activates
the alarm and causes a "late confirmed trade" message to be
displayed at 202, 204. This is shown by way of example in the
message flow chart of FIG. 4.
[0019] At the host computer 200, if desired, an optional checking
system may be provided. In such an instance, the receipt of a
message 3 from client B (KS B) offering to buy certain trading
instruments at the offered price will prompt a command signal on
terminal S3 to operate a timer and also send match notification
signals 4 and 6 to the respective clients or keystations via
terminals S4, T4, S6 and T6. This is shown by connections in FIG. 1
and, by way of example, is illustrated by the message flow chart of
Figure S. The match acknowledgement signals 5 and 7 which are
received back from the client keystations prompts corresponding
command signals at terminals S5 and S7 which will be passed to the
match notification store. If the trade has not yet been
acknowledged by either party, the first signal preferably causes
the store to change to the state of having been acknowledged by one
party. If it is already in that state, the receipt of the signal
will preferably have three functions; namely, to stop and cancel
the timer, to declare the match as fully acknowledged at the host
computer 200 and to send confirmation messages 8 and 9 to the
respective client keystations via terminals S8, T8, S9 and T9 of a
"confirmed trade." This is shown by way of example, in the
connections of FIG. 1 and the message flow chart of FIG. 6.
[0020] If the timer at the host 200 is not cancelled and reset
within a predetermined time, such as preferably 60 seconds, by way
of example, a time-out signal with two functions is preferably
generated; namely, one to cancel the timer, and the second to
activate an alarm A and declare the match as "unacknowledged" at
the host 200. The "un-acknowledged" declaration may, if desired,
prompt an operator at the host 200 to take action to check with the
respective clients or counterparties to the trade, or the checking
may be left to the clients 5 or counterparties to the trade to put
in hand themselves, either directly between clients, if they have
been made aware of the identity of the other party to the trade or
match, or else through the medium of the host 200 if the identity
of the other party has not yet been revealed. This is shown, by way
of example, in the message flow chart of FIG. 7.
[0021] When the clients or counterparties remain unidentified to
each other until the match is made and acknowledged, message 4
preferably only contains details of the amount purchased and does
not identify the buyer, the details of the buyer preferably only
being included in message 9. If desired, message 4 could contain
the missing identification data, and this identification could be
suppressed by the display until message 9 is received. Similarly,
the details of the vendor need not be included in message 6 to the
purchaser, preferably being contained, instead, in message 8, or
they could be included in message 6 and suppressed until receipt of
message 8.
[0022] When clients or counterparties are identified to each other
at an early stage, subsequent communication, if desired, can be
made directly between the counterparties and need not be through
the host 200. However, in such an instance, full records of
transactions in all stages cannot then normally be made at the host
200, although the resultant direct communication further reduces
the chance of transmission failure.
[0023] Referring now to FIG. 8, the improved matching system of the
present invention shall be described in further detail as a
specific improvement on the anonymous matching system described in
U.S. Ser. No. 357,748 the contents of which has been specifically
incorporated by reference herein in their entirety. As shown and
preferred in FIG. 8, the transaction desk or T-desk utilized in the
anonymous trading system of the above application for risk
management has been eliminated and replaced by the improved system
of the present invention in which timers 300, 302 are located, by
way of example, at the individual client keystations KS A, KS B,
respectively, for timing receipt of the "confirmed trade" message
and/or ticket generation message from the host 200 in order to
generate an alarm condition and display trade status on displays
202, 204, respectively, when the "confirmed trade" message is not
timely received within a predetermined period, such as the 15
second time period given by way of example in the discussion of
FIG. 1, as well as an unconfirmed trade "status message pending
confirmation," or a "late confirmed trade" status message for
trades confirmed after this predetermined time period. In addition,
the system of FIG. 8 includes the provision of the optional timer
304 at the central host 200 for timing receipt of match
acknowledgement signals from the respective keystations KS A, KS B
within a predetermined period, such as the 60 second time period
given by way of example in the above discussion of FIG. 1.
Preferably, in the improved matching system illustrated in FIG. 8,
a trading ticket is not released by the host 200 until the host 200
has received the match acknowledgement messages or MATCH-ACK for
that match or trade from the counterparties to the trade which, in
the example of FIGS. 1 and 8, are keystations KS A and KS B. As
shown and preferred in the example of FIG. 8, keystation A or KS A
is considered the transaction originating keystation which, in this
example, submits a transaction called "bid" to the central host
200, which bid is sent as a "bid notification" anonymously to all
keystations in the system at this point and as a "bid
acknowledgment" to KS A. Assuming keystation B or KS B has submits
an offer at that price to the central host 200, the central host
will recognize that a match is now possible and, assuming that the
predetermined matching criteria have been met, such as quantity and
gross counterparty credit limit, by way of example, the host 200
will then create a match which is not yet confirmed by the
counterparties to the trade and will transmit a "match
notification" message to the counterparties involved in the match,
such as KS A and KS B in the above example. Upon receipt of the
match notification message from the host 200, the respective
keystation KS A and/or KS B automatically transmits a match
acknowledgement message or MATCH-ACK back to the host 200 and the
respective timer, 300, 302, respectively starts timing the elapsed
time between transmission of the MATCH-ACK message and receipt back
of a "confirmed trade" and/or ticket generation message from the
host 200 which should occur within the previously set predetermined
time period, such as the 15 seconds given in the above example.
Preferably, assuming the host 200 receives the MATCH-ACK messages
from all counterparties to the trade, KS A and KS B, it will
automatically transmit both "the confirmed trade" message and a
ticket generation message to the counterparties which will cause
the display 202, 204 to display a "confirmed trade" or a "done"
message next to the particular transaction, as well as printing of
the corresponding trade ticket by the associated conventional trade
ticket printer 306, 308. If, however, the "confirmed trade" and/or
ticket generation message is not timely received by the particular
counterparty, keystation KS A or KS B in this example, within this
predetermined period, then preferably a warning message is
displayed on the appropriate display 202, 204 and, if desired, an
audible alarm may be sounded at the conventional keyboard 310, 312
used to input data at the respective keystation KS A, KS B.
respectively. However, preferably, if the "confirmed trade" message
and/or ticket generation message is subsequently received by the
keystation KS A or KS B after this predetermined period, such as
due to a delay in transmission somewhere in the system, then the
trade status message display at the keystation will subsequently
display a "late confirmed trade" message, although the warning will
have first sounded and/or been displayed at the end of the
predetermined interval. Since the timers 300, 302 basically also
control the trade status display on the keystation displays 202,
204 in response to changes in the trade status over time, these
timers 300, 302 are in effect trade status timers.
[0024] As was previously mentioned, the timer 304 at the host 200,
times the receipt of the match acknowledgement or MATCH-ACK
messages from the counterparty keystations so that if all of the
MATCH-ACK messages are not received with a predetermined period
after the match has occurred, such as the previously mentioned 60
second period in the above example, no ticket for the match and/or
no "confirmed trade" message will be transmitted from the host 200
and the trade will remain in the "unconfirmed" state, and, if
desired, an alarm condition will be provided at the host 200.
[0025] It should be understood that once the improved procedures
employed in the above system are understood, based on the foregoing
description, the implementation of these improved procedures in
accordance with the message flow diagrams of FIGS. 2-7 will be
readily understood by one of ordinary skill in the art and need not
be described in further detail hereinafter. Suffice it to say, that
by eliminating the transaction desk and placing conventional timing
lapse circuitry 300, 302 at the individual keystations KS A, KS B,
risk management in an anonymous trading system is significantly
enhanced over the type of approach employed in the aforementioned
U.S. patent application Ser. No. 357,748
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